In A&A Martins Pty Limited v Liu [2019] ACTCA 8, the ACT Court of Appeal rejected a subcontractor's claim against a principal for unjust enrichment.  The subcontractor claimed that the enrichment arose when it performed building work for the principal following the purported termination of the principal's contract with the head contractor.  The question was complicated by the fact that the head contractor and subcontractor were related parties and had referred to themselves interchangeably as the contracting party across the contract, invoices, emails and other documents.  This was a key factor leading the Court to reject the subcontractor's claim.

Relying on the High Court decision in Lumbers v Cook [2008] HCA 27, the Court reiterated the need to look to any contracting arrangements which the parties have made in considering claims for a quantum meruit.  The Court held that it was not possible to “ignore the contractual relationship and posit a situation where [the subcontractor] was no longer acting as [the head contractor's] subcontractor”.  This was because the subcontractor could not demonstrate that the principal had actual or implied knowledge that it was no longer acting as the subcontractor and instead was looking to the principal for payment. In this context, the Court noted that it is not unusual for owners to have discussions on site with subcontractors.

The Court also noted that any unjust enrichment of the principal was not at the expense of the subcontractor but at the expense of the head contractor.  However, the head contractor had not raised a restitutionary claim against the principal in previous proceedings and that such a claim would likely now be “stymied by a limitation defence or by the raising of an Anshun estoppel”